Economic growth, which should reach about 3% in 2006, is likely to slow in 2007 and 2008 in a context of tighter monetary policy and a slightly less buoyant international environment. GDP will continue to rise more rapidly than potential output however, which should entail a further reduction in unemployment. Inflationary pressures seem likely to remain low, however.
With the economy still growing strongly, the gradual tightening of monetary policy towards more neutral conditions should continue. Steps will also have to be taken to keep social spending under control and maintain healthy public finances. Recent economic results, though encouraging, must not lead to complacency: potential growth needs to be strengthened, which requires the pursuit of reforms to stimulate competition and boost productivity.
|Population (000s), 2005||7 438|
|Area (000 sq km)||41|
|GDP (Billion USD), 2005||271.3|
|Life expectancy at birth (Women, Men), 2004 ||83.7, 78.6|
|Total labour force (000s), 2005||4 371|
|Government type||Federal Republic|
|Indicators||% change unless otherwise indicated|
| Consumer price index ||1.0||0.9||1.2|
| Unemployment rate (%)||3.9||3.6||3.3|
|General government financial balance|
|Current account balance (% GDP)||15.3||16.6||17.9|
No. 258/259, December 2006